Are Silicon Valley Startups More Likely To Be Acquired? | Hacker News Reader

Are Silicon Valley Startups More Likely To Be Acquired?

techcrunch.com

19 pointspeter12310 comments

"A startup based in Silicon Valley has a 6.9% chance of being acquired. New York startups come in second with a 4.9% acquisition rate."

Then how do they explain Washington's higher 8.2% rate?

They conveniently ignore it since it doesn't fit in well with their agenda/propaganda? Either that or Mike isn't very good with numbers.

I like this comment though:

  >> The data could also get interpreted that startups in
  >> the valley have a lower revenue success rate and fewer
  >> working business models and the only strategy remaining
  >> is an acquisition before landing in the deadpool.

  >> Since when is the primary goal of startup to get
  >> acquired? I thought companies are about finding a
  >> business model. Oh wait, that might just be my “out
  >> of valley” thinking model…

to be honest, it looks like he assumed the table was sorted by acquisition rate... would have made a lot more sense that way, instead of sorting it by # of startups

Yeah you'd have to be a rocket scientist to be able to look down the list and find the biggest numbers...

Off topic, but very funny: http://www.youtube.com/watch?v=THNPmhBl-8I

Then how do they explain Washington's higher 8.2% rate?

You should read the comment in the original post (http://www.tonywright.com/2009/should-you-move-your-startup-...) by user abscondment.

He contends that the data that Tony wrote is uncertain because there is less data available on Washington than California, so he propses using a confidence interval of at least 97.5%, which puts California in the lead. Lowering the confidence interval even more would give California an even greater lead.

That's just silly. A confidence interval by definition is a range; the commenter is arbitrarily choosing to post only the low end of that range. If the high end were posted instead, Washington's lead would look that much more impressive.

That's not to say the math is useless; a better statement (which could have been supported by the data) would have been "The difference between CA and WA is less than the measurement margin of error given WA's small sample size".

This stat is not surprising. The tone of the article assumes acquisition is the only interesting result. I prefer profitability. Stats on profitability of startups is sparse. I would guess some locations would show higher rates of profitable startups simply because its your only meaningful goal.

Wait, why would you guess that? There's a rational reason for a higher number of sales in the Valley - there's a concentration of acquirors - but profitability generally has very little to do with proximity to paying users/advertisers, except for very large numbers (i.e. TV and cable networks).

I don't think you can say one is necessarily better than the other. Some people may be better at going from zero to something than running a larger, steadier firm. These people are probably better off building and selling. Likewise, some people may be great at profitably running large (or at least more stable) firms, but fail at creating something from nothing.

I'm sure acquisition is much better for many, just not what I go for usually...don't get me wrong, I'm happy to get acquired as well ;). The reason I'm wildly guessing that other cities might show better profitability ratios is simply that they have less expectations from the start of acquisition.

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